Buying a house ...

[DSTRen13]

I'm sure there are other threads on this; I just couldn't find them.

So, basically, my husband and I are looking into buying a house since the market is in the toilet. We have no clue what we're doing. Anyone have any good tips they'd like to share? We'd love advice from anyone and everyone who's done this before! Any opinions on whether it's better to spend a bit more on a newer home or less on an older home that we can spend time fixing up?

[ComradesTrue]

No matter what type of house you decide on, get a professional home inspection before you buy. It amazes me that people will pay $250,000 for a house and skimp on the $400 home inspection. Even newer houses can have unseen problems with mold, foundation, etc.

[APhi Sailorgirl]

Welcome to the world of house buying. My fiance and I just purchased a house and closed in March. It's been a lot of fun and stress all together.

Helpful tips:

We went with a mortgage broker. He was recommended to us by a family member it was better to have him run numbers across a large amount of loans vs. using a bank and just what they can offer.

Get a good realtor. Sellers are still thinking they're in a bubble. Some still don't realize that houses are not the same value as a year or two ago. It was good to have a realtor working for us. We again used a recommendation for this, but it also helps to possibly visit a couple open houses to "interview" realtors on your own.

Take copious notes and photos if you can. We actually only spent one day looking at houses, but months looking online (and we were in a very small market in terms of location and what we wanted). It was good for us to take notes to refer back. **If you go to a second showing take even more notes-open all the doors, cabinets, etc. Walk through the yard, drive by when it's raining/snowing.

As for new vs. old that's more of a person preference and your area. For us we purchased a home that's 20 years old, but we got a single family house. We could have gotten something newer in our price range, but it would have been a duplex. Plus my fiance is super handy, so the little things that we wanted to change have been easy so far.

Hope this helps! I think the best part was I could finally start buying all the decorating magazines and looking for inspiration.

[SWTXBelle]

RE: Home inspections. Make sure your inspector has a background in the systems he/she will inspect, or go ahead and pay to have an actual plumber, electrician, etc. inspect it. Some states will give an inspector's license to just about anyone - you want someone with actual experience.

[adpi*violet]

Just purchased our first house last fall, closed December 28th, and moved in New Years' Day. So far, (in these past 3-4 months) we still love it. It is new construction, purchased directly from the home builder.
Tips:
For price range – determine how much you can spend per month for a mortgage payment, up to a max amount, depending on your particular budget. Add in any money available for a down payment. Keep in mind that closing costs, monthly home insurance and taxes will be part of your full mortgage amount and monthly payment.
We had a basic idea going into our house hunt, but our realtor also helped us get into a more expensive house then we originally thought we could afford due to negotiations which brought down our mortgage rate.
The other thing to determine your price range before you even start looking is to look around at various lenders to see the current interests rates as that will affect your per month payment. If you find a preferred lender, look at their max rate and pad it a bit, in case it goes up before you are ready to buy/ close. If you don’t have a preferred lender, take a look around at the rates and get an average one, but again pad it a bit.

Next bit of advice- sit down and make your dream list of what you want in a house- either rank it in order of your preference, or put the things you want in categories, like “must have”, “want to have”, “would like to have”. This is very important! For example on our must have was 3 bedrooms plus an office. Want to have was a separate tub and shower. Would like to have was a 3 car garage.
Also- in that dream list, you should include areas (cities/ neighborhoods) you are looking in. Have a few that would be ideal and a few that would work, but then also know where you absolutely do not want to look. Many things will go into the area you are looking at- even if you don't have kids, you may want to consider school district/ individual schools for future re-sale value.

Next- find a buyers agent. Ask for recommendations from your friends/ co-workers. It’s fine to look on your own at the MLS listings out there, just to get an idea, but the house we ended up with was not actually advertised on the MLS listings. It was an “inside deal” where the company contacted our agent and asked if she had any clients looking for the type of houses they had. So by having an agent, you will have access to more houses and they will be tailored more to your wants and needs.

If you decide to go with a new home- check out the builder to make sure they are a reputable company- BBB, etc. For both an older home and newer home, I third the motion to get an independent home inspector to do the inspection- not one provided by either the seller or even your agent. Find your own and make sure s/he is licensed.

Hope that helps!

[ForeverRoses]

If the home inspector does find things that need to be repaired (mainly minor things) consider asking for money off the asking price or an allowance from the current owner so that you can fix it after you are in the house. Most sellers just want to sell the house and will go with the cheapest/quickest fix to a problem whereas you the new home owner might go with a more expensive but longer lasting fix. (For example water heaters, if you need a new one the old owner might buy a cheap model whereas you might decide to pay a little more for a larger or better water heater).

and READ the fine print. Don't sign anything until you have read everything and feel free to ask for copies so that you can get a second opinion on things.

[AGDee]

Originally Posted by Blondie93

No matter what type of house you decide on, get a professional home inspection before you buy. It amazes me that people will pay $250,000 for a house and skimp on the $400 home inspection. Even newer houses can have unseen problems with mold, foundation, etc.

DITTO DITTO DITTO. I spent $350 for a home inspection on one house and it saved me $70,000 worth of repairs that the house needed.

Think about what you "must have", what is easy to remodel on your own and what is not. For instance, paint and carpet color? no big deal to re-do. Ceramic tile in a shower? Whole big project that is a pain in the neck. Try to get a house with the "permanent" stuff pretty neutral.

[ilovemyglo]

A few items:

Go to two brokers, not just one. Each broker has different products available to them and get referrals for them- Sometimes your realtor will know reputable brokers. Be careful about just going to lendingtree or something a lot of those companies bait and switch guaranteeing you a rate of X and when you get to the closing table it has changed but you think it is too late.

Interview realtors. Typically the selling realtor gets a 3% commission and the buyer's realtor gets a 3% commission. That means if you see a house you like and it says the Relator that has it for sale is Susie B Bell, you may want to think twice about calling her and not using your own realtor- why? Because it can be a conflict of her interest. She gets 6% if she is the buyer and sellers realtor. And she may not tell you that you could ask for another 2% off or something.

When I bought my house we had a home inspector and then followed up with a structual engineer. I spent $1000 in inspections but it was worth it. We were able to get the house we wanted and not have to worry that it was going to crash down.... (even with our recent earthquake!!).


Other thoughts- ignore the paint and the ugly dirt, you can fix taht. So many people think that the houses aregoing to be move in condition. I looked at some foreclosures even. Putting some sweat equity can save you some money sometimes!

[aggieAXO]

Get pre-approved for a loan-many sellers won't even consider your offer unless you are pre-approved.

[summer_gphib]

Get your credit in order, and the financial documents you'll need ahead of time. Go ahead and start organizing bank statements, w-2's, and the last few years tax returns. That way you won't be scurrying (like we were) at the bitter end.

I can't agree more with the home inspection. We have gotten to the inspection part of the buying process and backed out of two houses because of bad (really, really bad) inspection reports. The inspector on the last one found things I never would have dreamed of looking for. For example their "new roof" found that they had put up tar paper and shingles with whole sections having no wood behind it, electrical shock risks in the pool, etc.

Also check commute times, and community resources in the area. Calculate that into the price as well. So if it's going to take you twice the amount of gas weekly to get to and from work, remember that it's a consideration.

Also (others have said it) remember to take into account taxes and insurance and if you are going to put it into escrow, calculate it montly.

You may want to consider a lender that allows penalty free pre payment. Our lender has a pay 52 program, where we can make 1/4 payments weekly instead of one montly payment. You end up making a total of 13 montly payments a year with the additonal payment going to principal only. It ends up cutting 7 years of the loan. Not that you will stay there that long, but it adds equity.

[Leslie Anne]

If you end up looking into condos, townhomes or any community with a Homeowner's Association make sure you review the CC&Rs (Covenants, Conditions and Restrictions) very carefully. Get clarifications if you have any questions and make sure you can live with the rules.

Add monthly HOA dues to your budget and leave room for the dues to go up. (Sometimes there will also be "special assessments" for big projects within the HOA.) Take a close look at the community after reviewing the CC&Rs. You want to make sure that the Board is actually doing their job. (i.e. suppose satellite dishes are forbidden yet you see them on several homes/units. That could be an indication that you've got a weak Board.)

I'm not sure if it varies from state to state but, if you can, ask to see documentation regarding structural integrity. Find out if the Board is up to date with payments...insurance, maintenance, any applicable utilities.

Not to scare you but problems within HOAs occur mostly out of laziness and, at worst, fraud. As long as you go into it with your eyes wide open you should be okay. If you'd like an attorney to review the CC&Rs, by all means, do it.

Best wishes in finding a great new home.

[Cardinal026]

My fiance and a bought a new construction, after looking at over 60 different houses. The biggest piece of advice I can offer is to figure out how much you can afford to pay, not how much the bank is willing to give you.

We got pre approved for a very high amount. Thinking that was what we should spent, we went out looking at some very nice homes - until we did the math, and realized how house poor we would be. The one we bought is just over $100K less than what the bank was willing to give us.

Also, ask for recommendations from local friends and family for buyers agents and mortgage brokers. We got such rave reviews about our BA, and he became a very good friend of ours - we trust him completely.

As for spending more on a new home versus fixing up an older one, be realistic about how much time you can devote. We thought we'd do a fixer up, until doing research about hanging drywall, knocking down walls, re-tiling kitchens, etc. We knew that it would take years to get the house the way we wanted, so to us, we chose to spend more, and have exactly what we wanted, the day we moved in.

Lastly, I've had several friends get GREAT deals on foreclosures in their areas, and as long as you get the inspection, you can sometimes really luck out. But avoid a Short Sale like the plague - its a pergatory where the owners don't really own the house, and neither does the bank, and you'll wait weeks to months to get a response on your offer. We made the mistake of making offers on 3 different short sales, and it was the BIGGEST waste of our time and energy. Wait til it goes into full foreclosure!

PS - when people say that the three most stressful things are kids, getting married and buying a house - they're not kidding. I am staying here for the next 30 years because I dread going through the process again!

[fantASTic]

One thing I've heard is that you should never buy the most expensive house in a neighborhood - it means it will not gain as much value because it is limited by the other houses around it.

That's all I got.

[srmom]

Location, Location, Location!!!

Someone upthread mentioned this briefly, but it cannot be stressed enough.

You may be able to afford some insta-mansion (picture stars in your eyes over all the cool amenities in a brand new home) in a new "master planned community", but it may very well lose its value due to location. It may be better to buy a smaller home in an established neighborhood because there will always be a demand for the property, even if the house is a teardown.

[DSTRen13]

I really wish we knew more local people. It's so weird; back "home" (it's no longer my home! ), I knew all the neighborhoods, and half my family was in construction/development so I knew all the right people to go to for these things. Here it's just ... a mystery. I really feel like a fish out of water.